Marital Assets and Liabilities Part 5 of 15 | Divorce Attorney Fort Myers/Naples
Enhancement in Value and Appreciation
- Enhanced by marital funds or labor. Pursuant to Fla. Stat. §61.075(6)(a)1b, a non-marital asset may be altered into a marital asset to the extent that its value has been enhanced by marital funds or labor.
- Active Appreciation. However, the appreciation must be attributable to active appreciation, instead of merely passive appreciation. Cole v. Robert, 661 So.2d 1156 (Fla. 2d DCA 1995).
- Burden of Proof. On the wife to establish that:
- The Husband actively managed his accounts during the marriage;
- As a result of the Husband’s marital efforts, his accounts enhanced in value; and
- The actual value of the enhancement. Gromet v. Jensen, 2015 WL 5973933 (Fla. 3d DCA 2015)
- Mortgage Reduction. Increase in equity resulting from paying down the mortgage with marital funds constitutes a marital asset subject to equitable distribution Kaaa v. Kaaa, 58 So.3d 867 (Fla. 2010) Somasca v. Somasca, 2015 WL 4610463 (Fla. 2d DCA 2015)
- Passive Appreciation in Value of Home Test. Kaaa v. Kaaa, 58 So.3d 867 (Fla. 2010)
- When a marital home constitutes nonmarital real property, but is encumbered by a mortgage that marital funds service, the value of the passive, market-driven appreciation of the property that accrues during the course of the marriage is a marital asset subject to equitable distribution under section 61.075(5)(a)(2)
- passive appreciation of the marital home that accrues during the marriage is subject to equitable distribution even though the home itself is a nonmarital asset.
- First, the court must determine the overall current fair market value of the home.
- Second, the court must determine whether there has been a passive appreciation in the home’s value.
- Third, the court must determine whether the passive appreciation is a marital asset under section 61.075(5)(a)(2). This step must include findings of fact by the trial court that marital funds were used to pay the mortgage and that the non-owner spouse made contributions to the property. Moreover, the trial court must determine to what extent the contributions of the non-owner spouse affected the appreciation of the property.
- Fourth, the trial court must determine the value of the passive appreciation that accrued during the marriage and is subject to equitable distribution.
- Fifth, after the court determines the value of the passive appreciation to be equitably distributed, the court’s next step is to determine how the value is allocated.
- Burden Shift. Once it is proven that there was active appreciation of a non-marital business or property, the burden then shifts to the other party to show that some, if any, portion of the enhanced value is exempt from equitable distribution. Gaetani-Slade v. Slade, 852 So.2d 343, 347 (Fla. 1st DCA 2003).
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